Central Banking’s “Fatal Flaws” Dooming the Economy!

That’s all I could think this week after reading a pair of stories. One focused on how European Central Bank head Mario Draghi is trying to browbeat the Germans into agreeing to more QE and massive deficit spending over there. Another suggested that the “Oil slide puts central bankers over deflationary barrel” — and that the supposedly sensible reaction is even more global easing.

Why does this kind of stuff infuriate me?

First, we are what? Six years past the depths of the credit crisis and Great Recession? The U.S. Federal Reserve has launched QE1, QE2 and QE-Infinity, while the Bank of Japan has been printing trillions of yen and buying bonds, ETFs, and more in its own version of QE for years.

What do we have to show for it? Nothing!

The boatloads of money that central bankers have printed over the past few years hasn’t done squat for the real economy.

It hasn’t done a hill of beans good for the real economy, even as it has artificially inflated asset prices. Heck, even the head of the International Monetary Fund (IMF), Christine Lagarde, admitted as much when she said a few days ago that thanks to money printing, “There is too little economic risk-taking, and too much financial risk-taking.”

So why the heck would Draghi think it would do any good in Europe? The truth is, it won’t! We have the proof here already. After all, if QE really turbocharged the real economy, why would the Fed keep rolling out new iterations of it every year or so?

Second, let’s talk about this freak out about falling inflation caused by the declining price of oil. Excuse me, but why would central bankers want to drive up raw costs to spur inflation? That’s totally backwards thinking!

“Good” inflation is inflation in wages that gives us all more money to spend, even as our costs and expenses go down. “Bad” inflation is when wages are going basically nowhere (as they are doing now) but costs are going up, resulting in less disposable income!

Think about it: Let’s say you earn $500 a week, but have to spend $200 on unavoidable expenses. That leaves you with $300 left over to spend on everything else.

Would it be a “good” thing if your expenses were to rise by $200 a week, even as your $500 paycheck remained flat? Of course not! You’d only have $100 leftover to spend on everything else.

Yet modern central bank thinking seems to be that driving currency values down, driving up raw costs, and otherwise spurring this “bad” inflation is somehow beneficial! Do you see why I think these people are off their rockers?

Bottom line: Modern central bank thinking suffers from two “fatal flaws” — the belief that all inflation is good inflation, and the belief that QE actually does something useful for the real world. And I believe that even the blockheaded “experts” on Wall Street are finally, grudgingly accepting that reality.

Truth be told, I believe that’s one of the major reasons the stock market is suffering these days. Sure, headlines about Ebola, ISIS, Putin, and more don’t help. But if investors are finally being forced to acknowledge that all the king’s QE and all the king’s low interest rates can’t put the Humpty Dumpty global economy back together again, that’s a recipe for disaster for many low-rated, higher-risk stocks, especially foreign ones.

So please make sure you’ve taken some of the steps I’ve recommended already — grabbing profits, cutting losses on losers, and raising cash. Also start looking into downside hedges again. I’m talking about things like inverse ETFs that are designed to protect you if Europe, Japan, China, and other foreign economies threaten to drag us down into the financial abyss.

Make sure you also swing by the Money and Marketscomment section and let me (and your fellow investors) know what you think about all of this.

Is the central banking cabal finally meeting its match — the realization that low rates and more QE simply aren’t working anymore? Are the ongoing economic problems overseas finally pushing the U.S. economy over the edge, setting the stage for a nasty market decline? Or is this recent pullback nothing more than another correction on the road to higher prices?

Until next time,

Mike

Mike Larson graduated from Boston University with a B.S. degree in Journalism and a B.A. degree in English in 1998, and went to work for Bankrate.com. There, he learned the mortgage and interest rates markets inside and out. Mike then joined Weiss Research in 2001. He is the editor of Safe Money Report. He is often quoted by the Washington Post, Reuters, Dow Jones Newswires, Orlando Sentinel, Palm Beach Post and Sun-Sentinel, and he has appeared on CNN, Bloomberg Television and CNBC.

{62 comments }

Larry JonesFriday, October 17, 2014 at 8:21 am

Mike, I totally agree with your fury. I feel the same way and cannot imagine that anyone with half a brain can support such crazy central bank policies.

BillSaturday, October 18, 2014 at 9:35 am

The Fox is in hen house in that the big bankers controls the governmen. They are stealing the Silverware on the way out the door.
The general population is fed up and I fear the time when a new leader of the people arises. It would t take much to get the people to follow as they have so very little to lose. 80+ percent live paycheck to paycheck on wages that are 20% of what they should being paid. I calculate the minimum wage should be 37.00 per hour.

Gary JunkinsFriday, October 17, 2014 at 8:23 am

I have read “The Harbinger” and am getting ready to read Jonathan Cahn’s latest book “The mystery of the Shemitah ” ! It’s not only biblical but will tell you where the economy ie; stock mkt. is headed.Mike – If you would send me YOUR email I would send you a short video explaining the Shemitah. Keep up the good work – I am always anxious to read your columns! Gary

AllenFriday, October 17, 2014 at 8:31 am

Mike, the central bankers are not stupid. There is a method to their madness. Follow the money. A few people are getting rich off this. It may not be good for most of us, but I can assure you it is good for them.

zbigniewSaturday, October 18, 2014 at 7:18 pm

bingo. people are ready for a leader like andrew jackson. since thats not gonna happen
they will go for a phoney baloney anti bankster like adolf hitler. you dont have to blame the jews to do this only be an ultra nationalist that will make putin look wimpy. however the reich was funded by the us uk banksters to offset the red army another bankster project.
so even this cant happen. but hard core right wing pols can rant ‘yes we can’ to outdo the last phoney. in the end a new nero cannot stop the decline and fall of the dollar empire.
but the rearrangement will not be simply down with banksters power to the people. its highly complex. not going to elaborate but it will not be judgement day just a new deal.

BobFriday, October 17, 2014 at 8:32 am

So, Mike, what do the central bankers get out of cheaper money and QE?

JackFriday, October 17, 2014 at 8:34 am

Just a comment on “Bankers” they seem to all want more inflation > could it be that their “profit margin” makes it more “acceptable” when savers get 5% or more and they can loan it for 10 or 12% ??

jrj90620Friday, October 17, 2014 at 12:50 pm

I’m old enough to remember,the late 1970’s,when all they wanted was less inflation.Seems like it goes in cycles.When all this fiat creation results in major decline in the value of the currency,they will be wishing they hadn’t chosen inflation.

MitchFriday, October 17, 2014 at 8:38 am

Hi Mike.
Excellent column. I believe that as the global conspiracy continues to push the USA and everyone over the edge, people, like yoursel will realize we have been duped.
Banks on Wall Street are the only ones earning anything. By hook or CROOK as they say.
The unemployment numbers are a sham, the stock market is bought up,and propped up by the fed, commodities are manipulated,and our Government handles everything like it is handling Ebola. So glad you see this. The Harbinger, is excellent reading for our times. Mitch

LarryBFriday, October 17, 2014 at 9:00 am

Well all I say is when you are playing the market if you fight it YOU WILL LOSE!!!
Ranting and raving won’t help.

GRBFriday, October 17, 2014 at 9:01 am

Mike,
What’s this debt thing? You know full well that the Fed is a fraud……, like the US treasury owing the Fed for money it created at the stroke of a pen? Give me a break. All the sovereign US govt. has to do is to nationalize the Fed and erase the debt on the books. From there on, it can continue “easing” with CREDIT-BASED money creation….., a constitutional mandate. Money is just a token representing the value of all goods, services, and assets of the economy, and the willingness of people to use it for trading and commerce. Sovereign money supply is one thing, private debts among people and/or their commercial bank is another. There should not be such a thing as government debt. It’s a bankster’s fraud which started in 1913. Let’s get rid of the bastards.

terry sheadFriday, October 17, 2014 at 9:03 am

Mike,
Its a pity your fed and the plonkers that run you have not woken
up, we have the same problem in the uk.
The only decent guy you have and that is Ron Paul, I whatched a
dvd on him and he made a comment of one guy on the financial
side of your government thought you were still on the gold
standard, plonker?

jrj90620Friday, October 17, 2014 at 12:48 pm

You are correct,about Ron Paul,but maybe 3% of the population supports him.Just too honest and intelligent for Americans.

Mike SFriday, October 17, 2014 at 9:28 am

Mike,

Two points:

1. You are forgetting your history… 1929 was caused by the same stupid Republican policies that brought October 2007… 1929 was repaired through massive Federal stimulus under FDR… In 1935 they slowed that stimulus and the markets fell again. Federal stimulus was reapplied and the markets rallied and repaired… Same thing happened after the Cheney/bush Crash. Thank God this bunch of Republicans only had 13 months in office as the markets had fallen 40% before Obama, like FDR began Federal stimulus on March 2009…. Now they are talking about reducing an the markets are pulling back… Luckily, with the 2007 GOP damage of 40% much smaller than the Hoover damage of 90%, it isn’t taking as long to repair…

2. The political leanings of your sight are acting like blinders on your commentary… Think that is b.s.? Where was your outrage when Cheney/Bush where leading America over a financial cliff with their huge tax cuts to their wealthy buddies, while not reducing spending. Where was you outrage when they drug us into Iraq over falsified intelligence and left us with what is projected as a 6-7 Trillion dollar bill… Where was you outrage when millions of good Middle Class jobs where getting exported to China and Mexico after the Republican Revolution in 1982… Where was your outrage when Gramm/Leach/Blyle (All powerful Republicans) removed the Glass-Steagall Act of 1933, in 1999, that allowed the same financial irregularities that took the markets down in 1929… Yea, I know Clinton was hoodwinked into signing, but the GOP majority could have overridden his veto… I could go on and on, but I believe you are getting the picture, aye?

jrj90620Friday, October 17, 2014 at 12:47 pm

The New York TImes is the place you ought to be.Krugman and friends,believe the same nonsense.

FredFriday, October 17, 2014 at 1:32 pm

Amen to that. Obama has increased our National Debt from $10 Trillion to $18 Trillion in 6 short years….and that National Debt dates from the days of George Washington.

Mike S. has little to say about that “excellence in management” by the boy wonder from Chicago via Haaavaaad.

Mike SSaturday, October 18, 2014 at 10:44 am

It is called the Truth jrj…… Do some historical study and you will learn…. Or talk to your grandfather who lived through the Depression….. Incidentally, FDR was the most re-elected President in history, genius….. :(

Mike SSaturday, October 18, 2014 at 4:01 pm

You mean Krugman who is one of the most read, highest paid journalists in the world?

LiamWednesday, November 12, 2014 at 12:48 pm

So what? Does that make him any less of a charlatan? Most people are ignorant, illogical, low information voters anyways. Who else would elect somebody who has left the economy with 50 million on food stamps–the highest in U.S. history–, 50% college grad unemployment rate, 8-10% real inflation, which decimates the savings of retirees who are being punished with low interest rates for saving their whole lives and being responsible, 10% annual inflation in medical expenses and education expenses and even jumps of 100% in monthly premiums thanks to Commie Care (Obama Care). Did I mention we have the highest unemployment since the 70s as shown by the employment population ratio, which cannot be manipulated like the “unemployment” rate which excludes millions of people who have given up work and the full timers who are now trying to support families on part time jobs? Obama has accumulated more debt than any of the presidents in the 200 years before him. Central bank presidents are “highly paid”. So what? Does that mean they know anything? No! They destroying the currency, which is increasing the cost of living for everyone and only helps the irresponsible people with huge debts, including the government.

rob98282Saturday, October 18, 2014 at 1:49 am

Mike S:
Thank you for what I consider a great summary of how we got to our present situation and some selective forgetfulness. I didn’t know critical thinkers such as yourself subscribed to any of the Weiss reports.

If I may, I recommend everyone who wants even more information read “Who Stole the American Dream” by Cedric Smith.

Another thing I would like to say is that the “central bankers” have been trying to keep the financial system operating, as opposed to falling apart or exploding, which is where it was in 2008. Let’s not forget, programs to “save the economy” started prior to 2009, when our current president took office. Having said that, Franklin D. Roosevelt’s plans for the government to hire the workers to get money circulating helped workers and restored the economy. QE programs and similar have helped bankers and those who already control our capitalocracy but haven’t done much to help production or consumption because the money has gone to “the wealthy.” Of course, they (companies and other entities that can afford to pay lobbyists and fund campaigns) have been able to take control due to our political apathy and ignorance.

Rob

Mike SSaturday, October 18, 2014 at 10:47 am

Rob,
Same geniuses who stole the American Dream in 1929, the GOP and their benefactors the Conservative Ultra Wealthy….. I agree that Obama should have reborn the WPA and the CCC camps…. That said, if the banks had gone under there would have been financial and economic destruction….. Elizabeth Warren is the key as she is one of the few in power who is pushing the reintroduction of the Glass-Steagall Act…

TomasFriday, October 17, 2014 at 9:30 am

Mike, Are Gov’t is smart! Econmic collapse? Nationalize pensions?Civil unrest?not with Ebola!No one will come out of there house!

RichardFriday, October 17, 2014 at 9:37 am

Mike,

Banks can print money, but they can’t print brains and ideas. We need more entrepreneurs to develop new products and services that will stimulate the US (and world) economy. Many great companies have been started in somebodies garage or basement. As our economy drift towards socialism and corporate cronyism, we can expect fewer great ideas from revitalizing our economy.

grover5995Friday, October 17, 2014 at 12:20 pm

Unfortunately, corporate dictatorship is where we are headed. Thanks to SCOTUS ruling in Citizens United, there is an unlimited flow of dark money that controls our Congress and the judiciary.

GEORGEFriday, October 17, 2014 at 9:52 am

MIKE, KEEP UP THE GOOD WORK

WITH THE OIL GLUT AND FALLING PRICES PLUS EBOLA AND REDUCED AIR TRAVEL I CAN NOT SEE HOW THE ECONOMY CAN NOT BE HIT AND CONTINUE TO DRIVE STOCKS DOWN. IF PANIC SETS IN IT WILL BE A BLOOD BATH. I PRAY THAT IT WILL NOT BUT I SURE WOULD NOT PUT MY MONEY ON IT.

GEORGE

DaveCFriday, October 17, 2014 at 10:10 am

Before congress, the last two Fed Chairs gave testimony that the Fed does not know how to measure a financial bubble, and that they do not know how to prevent a financial bubble. (This is extremely hard to believe, but this is what they testified.) My research shows that over the past 400 years of Western economic history, financial bubbles arise about every 80 years; ergo, we see a fairly regularly occurring 80-year credit cycle. Also, financial bubbles go through four distinct stages 100% of the time. Stage one: bubble inflation. Stage two: crash. Stage three: economic depression. And stage four: major war. Then the next credit cycle begins anew. We are presently still in the inflation stage of the present financial bubble, so Michael, although the ultimate future economic outcome is inevitable, be careful what you pray for.
I have devised a mathematical model that measures the status of the present bubble. First, let me say, the present bubble is by far the largest in human history, having begun to inflate in earnest in August of 1971 (43 years ago) when Richard Nixon took us off the gold standard. Second, make no mistake, the real bubble is in the debt market, but the debt bubble directly inflates asset bubbles. Most easily, we can see the asset bubble in stocks; but bubbles also exists in other assets as well, e.g., real estate, gold, collectables, etc. My model is based upon Fractal Mathematics (hats off the Mandelbrot), and allowed me to identify the stock market top in March 2000, and the stock market top again in October 2007. Recently, my model signaled the final bubble top in stocks of September 19, which might well go down in history as the Alibaba Top. Historians will find this to be significant and ironic, as China is the economic heir apparent to Western Civilization.
When financial bubbles burst, as they have in 100% of history, they collapse down to sustainable economic levels. In the present bubble, nominally, this level is more than 80% lower than the present S&P500 Index price. However, collapsing bubbles always overshoot. For example, the 1929 bubble, which was much, much smaller than the present debt bubble, collapsed by 90%. In the 1930s, the depression phase persisted until WWII, which brought that credit cycle to a close. That credit cycle had begun after the Civil War. Technically, the current credit cycle began in 1932, which means that its 80-year life cycle should have ended in 2012. So, the current bubble is running on borrowed time.
Either of the stock market tops of 2000, or 2007 could have been the final tops, except that the Fed rushed-in in both cases to “save the day,” i.e., continue pumping up the debt bubble. The 2014 top will likely be the final top as I cannot imagine what the Fed might do next to keep this Ponzi scheme going. I have no doubt that they will likely attempt something, but we are so late in the game that what they attempt will likely only crash the dollar. Unfortunately, I expect that they will indeed crash the dollar before they are finished. After all, since 1913, when the Fed was constituted, the dollar, under Fed stewardship, is already down by 98%. What makes us think they won’t finish the job?

FredFriday, October 17, 2014 at 11:23 am

Excellent analysis. I totally agree. The Fed has pumped this bubble up to unimaginable dimensions with their artificial mechanisms. We will all pay horribly for their economic devices. IMO, the Fed WILL cease to exist after this debacle is over. And we have had a couple of bad recent presidents (Bush and Obama) that have exacerbated the situation by leaving us in deep, deep debt….the current one the absolute worst, by far, in history.

Mike SSaturday, October 18, 2014 at 10:52 am

Kondrotiev came to the same conclusion in 1923…… One thing you missed…… The financial and economic failures ALWAYS happen after periods of Conservative domination… In the past 100 years that has been after periods of Republican Domination such as 1929 and October 2007…… And the repairs have always come under periods of Liberal (now Democratic) domination such as 1932-1982 and 2009 to the Present…..

I’ve learned that when smart people (such as Fed Chairmen) do things that don’t match what they say, there is another agenda at work. All this money creation is really about saving the banks and banking system by increasing their assets WITHOUT creating a lot of inflation in the general economy. Secondly, this policy favors the financial systems without overly stimulating THE REAL ECONOMY. Once these areas are put into better shape, then other considerations may come into the picture. RDH

Robert M.Friday, October 17, 2014 at 10:37 am

Is it time to lighten up your portfolio? STLD is down over 20% and others close to 10%.

FredFriday, October 17, 2014 at 1:39 pm

Definitely.

Go back in for a while (ONLY) when S&P hits downside target of approximately 1725-1750 for THIS leg.

Then look for another nosebleed rally……..

THEN……a holy massacre.

next year will be a dooseyFriday, October 17, 2014 at 10:44 am

Hello,

I am not sure what the fed is going to do this time next year. Next year the economy will tank due to a broken system. I believe the fed is “keeping face” because they can’t do anything else. What the fed is good at is lying to the people.

FredFriday, October 17, 2014 at 1:33 pm

It has already started. Will be the greatest financial collapse in history.

T.V.SinganalloreFriday, October 17, 2014 at 11:04 am

Main street does not differentiate between good and bad inflation. They have been psyched to think QE is good for stocks. Tapering QE gives the impression to main street that it is not good for stocks. Professionals like you have great logic against it but do not realize that market is frenzy at the moment about any with drawl of QE. Janet Yellen, Fed Chair, does not want FED to be prisoner of markets but she has no choice at the moment. It has to be done more deliberately and slowly not to affect not only US but also global economy. In the meanwhile try to educate laymen in more simplistic terms.

GaryFriday, October 17, 2014 at 11:15 am

Mike, I think you miss the point. They don’t want to fix the system. They are not trying to fix the system. Where do you think all that extra money that is being printed goes? It goes directly into the hands of the bankers and Wall Street.

If you give up on the idea that there is any effort being made at all to fix the system, then you can begin to look in the right places for answers. When that happens to you and many others, then perhaps we can begin to look for real solutions to the problem. They begin with taking the Fed out of the equation, and throwing a bunch of Wall Streeters and bankers in jail.

BOBFriday, October 17, 2014 at 1:02 pm

Aint’ gonna happen guy. That is why they have armed the NSA. They are the American equitant of the Gestapo.

KenFriday, October 17, 2014 at 11:42 am

Mike
I couldn’t agree more ! Do the Fed, the banks,and the influential truly believe they can come out unscathed from this ?
I am afraid as the inevitable resetting to reality over comes the fluffed up economy that we are currently in. That it will not only be the middle class, who get caught in the carnage.

guillermoFriday, October 17, 2014 at 12:32 pm

Anybody that thinks they own a share(s) of stock, mutual funds, bonds, IRA’s, 401K’s, pensions or your own house is living in a fantasy land.
The investments show you are only a “beneficiary owner.” All these entities, including the Central Banks are owned by the DTCC which is the subsidiary of CEDE Company.
The City of London owns it allllllllllllllllllllllll……………………

jrj90620Friday, October 17, 2014 at 12:43 pm

Say what?

jrj90620Friday, October 17, 2014 at 12:42 pm

What the Fed is doing,is working in the short term.No one really cares about the long term,anymore.So,the Fed is giving the public what they deserve.Until or unless we get voters who want an honest govt,things will continue as they are.If native Americans aren’t dumb/greedy enough,we are importing immigrants,who are worse.Don’t see any long term solution until the Titanic finally sinks.Don’t know about your recommendation,to hold cash.Cash(U.S. Dollar and all other junk currencies) are the common stock of bankrupt govts.I own stock in companies,a lot better run than the U.S. govt.Wouldn’t want to exchange my ownership in these great companies for ownership in the U.S. govt,run by idiot voters.

guillermoFriday, October 17, 2014 at 1:02 pm

With all due respect, you only think you own stocks in these great companies…

BOBFriday, October 17, 2014 at 12:56 pm

You guys kill me. I have been listening to you guys talk about how stupid these people are and how smart you are. You claim they are stupid and do not know what they are doing. THEY KNOW EXACTLY WHAT THEY ARE DOING. THEY ARE BRINGING IN A NEW WORLD ORDER. NEW WORLD ORDER IS ANOTHER PHRASE FOR A ONE WORLD GOVERNMENT. They have to destroy the present world governments to do this. When people are starving, the people of the world will cry out for a one world government. When are you going to wake up!

FredFriday, October 17, 2014 at 1:37 pm

Bob, not trying to be sarcastic here but…….do you have a mirror?…….(lol)

BOBFriday, October 17, 2014 at 2:08 pm

Fred, all you did was make a sarcastic slam at me. You did not make an intelligent reply about what I said.
All I am saying is that the people in control know exactly what they are doing and are steadily working toward their goals. We the people will never run America for Americans until We the people understand WHY THE WORLD ECONOMIES ARE BEING DESTROYED ON PURPOSE. We are being led to the slaughter. Read your history books. Their have ALWAYS been a group of people trying to rule the whole world.

FredFriday, October 17, 2014 at 2:18 pm

Sorry, Bob. Didn’t intend to ruffle your feathers. But when someone remarks that everyone else is commenting how smart they are and how stupid everyone else is…and then they launch off to set the record straight……I think a tiny bit of self reflection is in order. I’m sure you did not mean it that way, but that is the way it came across. Best……

RUSS SMITHFriday, October 17, 2014 at 1:34 pm

Hi!, Mike, Martin & Larry:
An investigation has commenced. Eney, Meany, Mine & Moe headed right out but came back empty headed wondering too like you do what the banks are up to accomplishing with all those QE numbers past, present and going forward? Say, Halliburton must again have its’ own private economy without skids out there in the Gulf charging their Gulf war risk premium on fuel around $400 per gallon. Maybe the banks see their Halliburton mentor making all that money & believe they can do just as good or better; kind of a race to the top of the economic ladder what do you say guys? Does real honest, old fashioned greed have a conscience or is it even suppose to think of anything other than itself? Halliburton has we the people on the hook for $400 a gallon fuel and the banks have US all hooked on Fractional Reserve Banking but which one will come in first at the top? It’s a race guys and they’re having so much fun pulling the wool aren’t they which means why should they stop what they’re doing to listen to anyone else guys? Full speed ahead for Halliburton and the FED.!!

“Govment” (remember Ronnie?) is not the “problem”. Thoughtful “governance” is and always has been. Whether by Kings, Queens, Dukes, dictators, corporate shills or elected officials. Mike S and DaveC had good input. I would add that “bubble” is too neutral a concept. “Binge and Purge Cycle” is more appropriate since the process is more a self-inflicted disease than “neutral phenomena”. Binge Cycles are created through policy and business decisions. The resulting Purge Cycle, very messy and destructive, benefits some of those that set the Binge Cycle in motion, but savages most. We can ill afford to continue the process. We need to support polices that reign-in the Binger’s (Managed Capitalism). In order to keep more value circulating in the USA creating more good paying jobs trade policy needs to reverse the rush overseas that has been occurring since the 70’s (couldn’t find a toilet made here!). In order to do that, the finger needs to point right back to all the corporate heads and their helpers in Congress that have moved production to China and elsewhere to capture more marginal profit so they wouldn’t need to pay it to their workforce. ~60% of the goods sold here from “China” are made by U.S. affiliates or divisions over there anyway (just like Japan after WWII). By the way who is putting all that money into the “currency” markets anyway? Isn’t there a more productive place for it?

bill stappFriday, October 17, 2014 at 2:02 pm

Mike…I totally agree with all your comments about the central bankers but I think you are missing one important point.The other countries having problems,particularly the Eurozone,can see that we are now doing relatively better even though we still have a lot of problems and they have probably convinced themselves that QE was at least partly responsible for that.They are getting desperate and rationalizing this into their thinking.And of course some of our people are probably thinking the same way.Looks like it might be contagious…..maybe we need a new vaccine.

BOBFriday, October 17, 2014 at 2:23 pm

Anyone that thinks these policy makers are stupid and don’t know what they are doing is blind and ignorant. They know exactly what they are doing and why.
You only have to look at history to see that their has always been a group of people in the world that were fighting to take over the world. (Hitler was the last) Communism is coming out of the grave.
This new world order is different than any in the past. It is not control with guns and bullets. It is with the computer. It is financial control. The present world economy has to be destroyed before the nations of the world are starved into accepting a one world government. When the time is right, the plug will be pulled and the present world economy will go down the drain. The United Nations is a joke right now but it is the back bone for a New World Order (one world government). The world must have a total breakdown before the people will demand one.

stevefFriday, October 17, 2014 at 3:15 pm

What? “Communism”? Wall Street bankers and the folks that go to Davos every year are not communists. All those trillions in the currency markets need to be doing something useful instead of trading back and forth for marginal gain. Do you really want a total world economic collapse to “wring out” the excesses? What kind of governance do you think we will get from all those panic stricken folks with guns in their closets??

tommrFriday, October 17, 2014 at 3:52 pm

What do I think of your recomendations? They smell like market timing!

NIZARFriday, October 17, 2014 at 4:10 pm

1. I totally agree with you. Keynesian theory is okay for a short spell but it must be accepted that Government spending is MUCH COSTLIER than private spending so for the same products governments tend to pay much higher prices so once again the cost vs. value effect comes into play. A much better scenario would be to ABOLISH Personal taxation and recover with a higher Corporate tax, Consumer tax, Property tax(to prevent hoarding).
2. Make the Criminal CEOs disgorge their ill-gotten gains and redistribute to the stakeholders.

craigSaturday, October 18, 2014 at 12:12 am

Central banks are a banking cartel designed to skim national economies. Elections are a charade, no politician gets elected without the oligarchy’s prior stamp of approval. After they get elected politicians want to stay in their cush jobs so they toe the corporate line. If politicians were really powerful they would have a higher pay-grade than corporate CEO’s.

JohnSaturday, October 18, 2014 at 10:40 am

I need an anti depressant after reading all these comments!! My belief is that nobody knows what the outcome of all these programmes are going to be/QE1….., EU Tax laws, Emerging religious wars, free trade agreements, Ever thing is now moving too fast to be able to analyise and understand.The economic text book to predict how the new global economy will behave has not appeared. Powerful computers and analytics now control the stock market movements. We are in a new paradigm and it will take 10 years to see what emerges. In the meantime newsletters, books, on line media will speculate and give opinions and make lots of money
Keep up the good work its keeping my mins active in searching for the opposite of whats written
John Limerick Ireland

Mike SSaturday, October 18, 2014 at 10:58 am

John,

Much the same was used after the Republican Hoover and his Republican Domination of Congress brought the Crash of 1929 and the Great Depression, and it worked under FDR, the Democrat….. Now it is Obama, the Democrat who is trying and succeeding (just like FDR) to clean up the Stock market Crash and mini Depression of Cheney/bush in October 2007….. Let us pray that he succeeds. If the Republicans succeed in stopping his efforts, we will have another market crash and Depression……

Readers that think this is B.S. out to check the stock market and economic gains under the Republican compared to the Democrats for the past 100 years….. Incidentally, the Democrats have something like 10 times the gains under Republicans… So much for the myth of the Republicans being the party of “Business”, aye?

guillermoSaturday, October 18, 2014 at 11:56 am

Wow. I don’t even know how to respond to that nonsense.

Mike SSaturday, October 18, 2014 at 3:56 pm

Try a history book or Google….

guillermoSaturday, October 18, 2014 at 5:47 pm

Where do I find the part about “the Democrats have something like 10 times the gains under the Republicans?. I’m always looking for that type of specific facts in a book………………

PeterWSaturday, October 18, 2014 at 11:36 am

I fully expect that the Rich and Powerful in the US will put you deeper in debt to bail out the Stock Market, Oh, by the way only the Middle Class and Poor will repay the debt.

The Rich and Powerful in the US have raped the world for decades, now like all Empires, the ability to Financially Rape has been reduced, due to people becoming too poor, so now the Rich and Powerful must steal from its own People, both in North America and Europe.

Currently the Rich and Powerful are on mission to bankrupt Russia by deny them access to the Credit Market, now they and Saudi Arabia are conspiring to Reduce the price of Oil, to help bankrupt Russia.

China would be a complete fool to allow this to happen,

So what will be the outcome – a Bankrupt Russia, or World War III,) our only hope, (this includes the Middle Class and poor in the US), is that the Rich and Powerful in the US will fail.

God’s Intelligent Structural Design as found in Nature, demands that we take responsibility for our lives, if not, we will be punished, we have not taken our responsibility of Controlling our Governors, thus we are being severely punished by God’s Intelligent Structural Design, this punishment could become exceptionally severe.

God’s Intelligent Structural Design does not accept excuses. as it is without Prejudice.

Mike SSaturday, October 18, 2014 at 3:58 pm

Peter,
Quit electing Republicans who are funded by the Rich and Powerful and this will get sorted out, just as it did between 1932 and 1982……

CliffSaturday, October 18, 2014 at 5:23 pm

Today it is only 3 words, MGP -and has been for many decades – Money, Greed, and Power! And they all fit together!!!!